Working in Costa Rica as a Foreigner

One of the most common questions about relocating is “can foreigners work in Costa Rica?”

Beach bus bar — Tending bar is a popular under the the table cash job for illegal immigrants in Costa Rica – the School Bus Bar, Playa Palo Seco

Whether it’s a full time job, something part time to supplement social security, or running a B&B on the side – practically and legally the concise answer is usually “No.” At the same time there are thousands of visitors that work.

Several challenges face foreigners seeking employment in Costa Rica.

First, it takes 3-5 years and costs several thousand dollars to gain the permanent residency status required to work legally.
Second, the competition for good jobs is fierce. Underemployment plagues a well educated resident population who have the inherent advantage of being familiar with the local work culture.
Third, the jobs are also where most of the people are – in the crowded, noisy, polluted, crime ridden, traffic jam clogged cities that foreigners are often trying to avoid.
Fourth, pay is low compared to what expats are accustomed to and compared to the cost of living.

Foreign Employment Exceptions & Loopholes

Remember, anything that gets around the work requirements to get a foreigner paid may take a job away from a Tico and will probably be met with a little animosity from time to time.

LOOPHOLE	ILLEGAL?	DOWNSIDE
Cash off the Books	yes	low pay, unreliable, deportation (a)
Work Online	a little	difficult to find, weird hours (b)
Barter for Room & Board	yes	low pay, unreliable, deportation (c)
Sponsored Unique Skill Permit	no	difficult to find, stuck in the city (d)
Gig Economy	yes	total mystery (e)
Own a Business	no	expensive, a LOT of work (f)

(a) Working in restaurants and the tourism industry for cash off the books is the most common way for foreigners to earn
(b) Remote work or online employment is probably the best way to avoid the pitfalls of Costa Rica’s foreign worker regulations but has some downsides like many of the jobs require actual skills, there’s a lot of competition, and teaching Chinese to school kids in Beijing means working on their schedule…2:00 a.m in Costa Rica
(c) Technically any form of compensation requires legal work status
(d) “Real jobs” where a corporation sponsors a legal work permit often hire from inside the company, require specific training and education and are usually in the city
(e) Gigs are a gray area. Things like Uber are technically illegal for Costa Ricans as well as foreigners so who knows…
(f) It’s extremely time consuming to deal with the red tape, bureaucracy and drama of owning a small business and very difficult to succeed since the owner is not allowed to “work.”

Residency Requirements for Working in Costa Rica

The perpetual tourist border runs that many expats use for the first year or two cannot be used to work legally.

There are a number of options to obtain temporary residency in Costa Rica but none of the temporary statuses permit foreigners to work. In fact one of the requirements for temporary residency is payment of a “security deposit” of several hundred U.S. dollars to cover the airfare and other costs of your own deportation if you’re caught working illegally.

There are two statuses that allow people from other countries to work in Costa Rica. The first is permanent resident which takes several years of bureaucratic red tape and thousands of dollars in legal fees to obtain. The second is naturalized citizen which require permanent residency plus fluency in Spanish, passing a history test and some more red tape and legal fees.

It should be clear that if you actually need a job it’s unlikely you have the time or money to pursue residency or citizenship while not working so consider other possibilities such as working in the gray area of the gig economy , obtaining a corporate sponsorship for a unique skill, working remotely and collecting your paychecks in a foreign bank, or being the boss.

Unique Skills & Sponsorship

Speaking English is not a unique skill.

Exceptions to the residency requirements may be made on a case by case basis when employers require unique skill sets and education impossible to find in the Costa Rican workforce. You’d think this meant to hire nuclear magnetic resonance imaging repair technicians or other exotic workers but more often it’s used by corporations like Amazon or Pepsi to import managers or executives trained in their U.S. offices.

Before you get too excited we’ll repeat that speaking English is not a unique skill. In fact Costa Rica has a highly educated bilingual workforce that can probably fulfill any job requirements except 15 years management experience at a U.S. or European company. If your boss hasn’t asked you to move to Costa Rica you probably don’t qualify either.

Now the good news. Speaking English combined with a bachelors degree in science or education may qualify you to teach the kids of the Amazon and Pepsi execs in private school. They prefer native speakers.

Working “Under the Table”

“Illegal Migrant Worker” isn’t a job title most aspire to but when considering moving to Costa Rica it suddenly becomes a valid option.

picking coffee — Picking coffee is one of the most common jobs for illegal migrant workers from Nicaragua and Panama.

Workers with illegal immigration status are vulnerable. Employers take advantage of the uncertainty and inability to complain about poor wages, lack of benefits, sexual harassment, or unfair treatment.

Immigration officers have the right to enter any business or workplace and inspect documents at any time. Anyone who appears to be working without permanent residency and a valid work permit may be subject to immediate deportation.

More often than not immigration is looking to impose a fine or collect a bribe from the employer and doesn’t go to the trouble of hauling illegal workers to the border. Even though the odd are against getting caught or ejected the constant threat of deportation makes working illegally untenable for anyone with family, responsibilities or possessions (no they don’t allow you time to sell your motor scooter).

The possibility of being permanently banned from Costa Rica is actually a minor annoyance compared to the main problem with working illegally – low pay.

Wages in Costa Rica are low to begin with and illegals earn even less – possibly only a dollar or two an hour. There are plenty of people on social media who’ll insist they have a buddy who pulls down $250 a night cash tips as a bartender. Believe them if you want but a legally employed cardiologist barely makes that much in Costa Rica.

The Gig Economy is a Gray Area

The government has not passed laws to regulate things like Uber so it might be possible to work without breaking any laws.

Working for Barter – Payment in Kind

Technically it doesn’t matter whether you’re paid in dollars, colones, or chickens. Working in exchange for room and board or other goods is technically just as illegal as working for cash without the appropriate status or permit.

Earning Without Working – Owner/Representante/Inversionista

We know a few people who’ve worked as bartenders or rafting guides to pick up a few extra bucks and extend their vacations but all of the expats we know who have real incomes in Costa Rica have started with the business ownership approach. Most have eventually attained residency or even citizenship and can now legally work at any job but they started by earning money not working.

Foreigners are allowed to invest in, buy or create a business that employs Ticos (or legal expats) for all of the work. They are technically allowed to “manage and train” but not do any “work.” It’s a bit unclear where the line is drawn but we know a restaurant owner who was fined and threatened with deportation when an undercover investigator observed them busing a table.

Costa Rica is near the bottom of lists of “business friendly” countries because of huge tangles of red tape and inept slow moving bureaucracies, unclear and arbitrary laws and regulations, lack of financing, and high costs of employment. Managing employees can be extremely tricky especially without accidentally doing any work. Existing businesses are landmines of litigation because you inherit responsibility for all the past actions of the company.

If that’s not enough to scare you off and you have a few hundred grand of your own money then hunt down a good accountant and better lawyer and start a business.

Remote Work from Costa Rica

We’ve been told by our lawyer that technically doing any work in Costa Rica without permanent residency, citizenship or a work permit is illegal.

Of course it’s ridiculous to picture the immigration police dragging some German CEO out of the hot springs at Tabacon and slapping them in handcuffs because they answered a work e-mail…pura vida!

In reality there are some gray areas. Remote medical billing work online and teaching English to students in China via video chat are popular remote jobs that expats with only tourist or temporary resident status take advantage of.

Costa Rica Cubicle – a workstation with a hammock

From experience, none of our friends have had a problem doing remote work and receiving pay in a foreign bank account while in Costa Rica.

We are not permanent residents and our visits are declared as “business” on the immigration form but we’ve never been asked for a work permit.

The most difficult part of remote work is finding a good job with adequate pay. The most common one we know of is teaching English to Chinese children online. The upside is that it can eventually pay up to $20 per hour (about 10x the Costa Rican minimum wage) but the downside is you have to work Chinese hours.

Wages in Costa Rica are Low – All Work & No Pay

After establishing temporary then permanent residency, proving you have a unique skill and obtaining a work permit you may be disappointed to learn that workers in Costa Rica earn as little as one tenth as much as their counterparts in the U.S., Canada or Europe.

Not surprisingly more highly educated workers earn more, but still not much. A business major or chemical engineer fresh from a Costa Rican university can expect to earn at least $6.19 an hour – less than half the wage of a teenager slinging burgers at McDonald’s in Seattle ($12.50 per hour minimum) and at least five times less than a college graduate in the U.S.

An entry level skilled/specialized worker like an electrician or computer technician worth $30,000 a year up north starts at less than $7,000 in Costa Rica.

Paying coffee pickers — Coffee pickers are paid ¢920 per “cajuela” which is a basket that holds about 30 lbs. It takes a fast worker about 1 hour to fill a cajuela so – $1.50 an hour. The uninitiated would be lucky to fill a basket in a whole day of picking.

Unskilled labor fares the worst with housekeepers earning less than $2 an hour and farm workers even less. Minimum wages in the first world are approximately 500% higher. A housekeeper at a hotel in Costa Rica will work almost all day to match the amount a maid earning minimum wage in Seattle earns in one hour.

The table below is from the Ministerio de Trabajo y Seguridad Social and shows legal minimum wages for various levels of education, training and qualification.

Job	per month colones	per year	per hour
Domestic Service	¢ 172,610	$3,602	$1.73
Unskilled Workers	¢ 288,387	$6,019	$2.89
Semi-Skilled Workers	¢ 310,259	$6,475	$3.10
Skilled Workers	¢ 326,149	$6,807	$3.26
Specialized Workers	¢ 366,261	$7,644	$3.66
Graduates	¢ 454,919	$9,494	$4.55
University Bachelors	¢ 515,986	$10,768	$5.16
University Graduates	¢ 619,205	$12,923	$6.19

Any plan to work in Costa Rica as an expat needs to take into consideration that not only are your skills likely to be worth less but there will be many locals willing to do the job for very low pay.

High Unemployment & Underemployment in Costa Rica

Official unemployment rates hover around 10% and underemployment is common adding pressure in the job market. After learning Spanish, establishing immigration status, obtaining a work permit, retraining to local standards and lowering salary expectations foreign job seekers still have to beat out qualified Ticos in a very competitive job market.

Income as a Cost of Living Yardstick

Another extremely common question potential expats ask is “can I live on $X per month in Costa Rica?” Often the number “$X” is a U.S. social security payment.

The richest ten percent of households in Costa Rica earn about $60k per year. The monthly U.S. social security payment at full retirement age (66 yrs) is $2,788 per person x 2 people x 12 months = $66,912 per year.

How low can you go? The Census Bureau (Instituto Nacional de Estadística y Censos INEC) reports that the average total middle class household income is $1,200 a month and that one out of four Costa Rican families live on less than $400 a month.